The Short-term Liquidity Line (SLL)
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- The Short-term Liquidity Line (SLL)
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Bibliographic details
- Published: March 10, 2023
Purpose and overview
- The Short-term Liquidity Line (SLL) is a liquidity backstop for members with very strong policy frameworks and fundamentals, who face potential, moderate, short-term liquidity needs because of external shocks that generate balance of payment difficulties.
- It aims to minimize the risk of shocks evolving into deeper crises and spilling over to other countries.
- The last update was in April 2025.
Eligibility
- A sustained track record of implementing very strong policies or be in the process of implementing them, and a commitment to maintain such policies in the future.
- In addition to a positive assessment of the country's policies in the most recent Article IV consultations, the country must have:
- Sustainable external position
- Capital account position dominated by private flows
- Track record of steady sovereign access to international capital markets at favorable terms
- Reserve position that remains relatively comfortable, notwithstanding potential balance of payments pressures that justify IMF assistance
- Sound public finances, including a sustainable public debt position
- Low and stable inflation, in the context of a sound monetary and exchange rate policy framework
- Sound financial system and the absence of solvency problems that may threaten systemic stability
- Effective financial sector supervision
- Data transparency and integrity
- The above criteria are the same as for the Flexible Credit Line (FCL). This facilitates the transition from the FCL to the SLL as well as concurrent use of the two instruments, if the relevant balance of payment needs requirement are met.
Conditionality, review modalities, and process
- Conditionality, review modalities, and process elements are applied consistent with the SLL’s role as a liquidity backstop for countries with very strong policy frameworks.
- The SLL’s qualification criteria align with the FCL to allow transitions or concurrent use where justified by balance of payments needs.
Terms, repayment, interest rate and fees
- If a member draws, these charges apply:
- A lending rate comprising:
- The market-determined Special Drawing Rights (SDR) interest rate—which has a minimum floor of 5 basis points—and a margin (currently 60 basis points), together known as the basic rate of charge
- Surcharges, depending on the amount outstanding credit:
- A surcharge of 200 basis points is paid on the amount of fund credit outstanding above 300 percent of quota (from SLL drawing or use of other instruments)
- The SLL does not count towards time-based surcharges
- Surcharges are designed to discourage large and prolonged use of IMF resources
- A non-refundable commitment fee of 8 basis points (bps) and a service charge of 21 bps
Access and concurrent use
- Access is revolving, enabling repeated partial or full purchases and repurchases within and across SLL arrangements.
- Repurchases would reconstitute the member’s right to purchase up to the maximum access approved.
- Successor arrangements can be approved for as long as a member country continues to qualify and has a special balance of payments need.
- Concurrent use with FCL (which shares the same qualification criteria) is permitted, if justified by the nature and magnitude of external risks and potential balance of payments needs.
Content in this bundle
- The Short-term Liquidity Line
References